Deep in Debt, Co-Founder Gone. Here’s How One Vietnamese Entrepreneur Fought Back

During my recent trip to Ho Chi Minh city, I met Loc, the founder of Aothun, a T-shirt design and printing startup which is now four years old. I visited his new factory(picture below) and startup incubator at the eastern end of the city, where he told me about his entrepreneurial journey and his vision for incubating a thousand fashion and design startups in the next two years.

Loc started his company immediately after his studies in 2009 when he was 24 years old. There wasn’t much investment capital in the Vietnamese market at the time and that made it even tougher to raise money for a non-scalable T-shirt design and printing company. He and his co-founder each borrowed US$7,500 from friends and parents as starting capital.

Inking a bad deal

Initially, business was brisk as there aren’t many T-shirt printing companies in Ho Chi Minh, and there was strong demand for custom-designed shirts. Seeing healthy profit and high demand in their services, they invested most of their capital into a printing machine to cope with the demand. The investment nearly proved to be a fatal decision for the startup company as the print quality from its new machines was really bad – and it seriously affected sales. Customers rejected orders and cash-flow dried up. At the end of the first year, they struggled with payroll for their 10 staff, as well as payment to suppliers. They were in debt.

This was Loc’s lowest point in his entrepreneurship life. Sales were bad, and his co-founder left. He owed his friends and family money, and no one offered help. He was alone. Times were very tough for Loc, and he remembers crying silently into his pillow almost every night. Only passion and his determination to prove himself kept him going.

Knowing that there was still strong local demand, he pushed on with his venture. At end of the second month, one of his best friends joined the ailing business. That friend contributed $2,500 and worked full time alongside Loc to rebuild and refine the business. At the end of second year, they regained all their lost customers and built up a profitable and stable company. Things were looking rosy.

Printing money

In the third year, Aothun attracted an investor who knew this T-shirt business well. This investor brought in new funding and expertise, taking the company to a level higher. Instead of printing T-shirts manually one at a time, they now had a $50,000 machine that could do high-quality printing at the rate of 700 pieces per hour. And in addition to importing T-shirts from suppliers, the company now imported yarn as raw materials and manufactured its own shirts. This gave the company far greater control.

Aothun is now the biggest T-shirt making and printing company in Vietnam. It owns two factories and has a sales office in central Ho Chi Minh. And with the manufacturing and printing process established, Loc now aims to help fellow Vietnamese entrepreneurs start out.

Despite Vietnam being the top ten garment exporter in the world, there’s just over 20 locally branded t-shirts. I hope to improve this statistic by reducing the barrier of entry to this industry and inspire more local designers and fashion entrepreneurs to start up apparel brands of their own.

He is offering his manufacturing and T-shirt printing production line to designers and fashion entrepreneurs to use at low cost. In the factory itself, Loc even has a 100-desk office to incubate entrepreneurs who wish to work and live in the factories for free. For poor, struggling entrepreneurs, he’s receptive to offering allowances and even free meals. Here’s the email to contact them.

These initiatives will certainly help many aspiring entrepreneurs in Vietnam, and kudos to Loc and Aothun for being a good inspiration, giving back to the community. We need more people like this in Asia.

Zipping through the busy streets in Ho Chi Minh on Loc’s motorcycle.

Aothun’s new factory. The blue machine at the front is capable of producing an output of 700 high quality 3D print per hour.